Key uncertainty - a faster mobility revolution

Electric vehicles are part of a broader mobility revolution that is taking place over the course of the Energy Outlook - which also includes autonomous vehicles, car sharing and ride pooling. What impact could a faster-than-expected revolution have on oil demand?

A faster mobility revolution could disrupt oil demand but the size and direction depends on its form.

Car sharing on its own doesn’t affect energy demand; it simply increases the intensity with which vehicles are used. But if combined with a new technology, such as an EV or AV, it can act to amplify the effect of this technology since more miles are travelled using this technology and less using conventional cars.

Ride pooling reduces the number of vehicle miles driven by raising the number of occupants per vehicle. A 10% fall in vehicle miles lowers oil demand by around 2.5 Mb/d in 2035.

But the mobility revolution could also provide an offsetting boost to the demand for car travel by lowering costs and enabling wider access to cars.

The impact of a faster mobility revolution on oil demand depends on its form. Two scenarios are used to explore the potential effects: these scenarios are purely illustrative and can be scaled up or down.

An extra 100m battery-electric vehicles could lower oil demand by around 1.4 Mb/d in 2035

A 10% fall in vehicle miles lowers oil demand by around 2.5 Mb/d in 2035

Impact on oil demand in 2035 (Mb/d)

* Ranges depend on relative efficiency of human versus autonomous drivers
† Car sharing assumes each car is driven twice as many miles as a ‘normal’ car

A faster mobility revolution could affect oil demand in a number of ways - higher penetration of electric cars, autonomous vehicles, car sharing or ride pooling could all lower oil demand through various channels, but these new technologies could also lower the cost of car travel and enable greater access to cars - providing an offsetting boost to oil demand.

Digital revolution

The digital revolution scenario assumes the technologies underpinning AVs, car sharing and ride pooling progress more rapidly than assumed in the base case, but reductions in battery costs and penetration of EVs are broadly in line.

The greater number of oil-based AVs improves vehicle efficiency and so reduces oil demand. This impact is amplified by AVs being used for car sharing. Ride pooling further reduces oil demand.
But these technological advances reduce the cost of car travel and enable greater access causing demand for car travel - and hence oil - to increase. The net effect for oil demand depends on the size of this demand offset.

Electric revolution

The electric revolution scenario builds on the digital revolution but assumes a more rapid penetration of electric cars, and that AVs, car sharing and ride pooling are all implemented only with EVs.

In this case, the greater efficiency associated with AVs has no implications for oil demand (since it only effects EVs), but car sharing of EVs amplifies the intensity with which they are used and hence their impact on oil demand.

Since these technological advances reduce the cost of travelling by electric cars, the extra miles that result boost demand for electricity rather than oil.

The impact on oil demand in cars in 2035 (Mb/d)

Digital revolution

Electric revolution

The impact of a faster mobility revolution on oil demand demands on its form. Two scenarios are used to explore the potential effects: these are purely illustration and can be scaled up and down